Soluble forms of angiotensin-converting enzyme 2 (ACE2) have recently been shown to inhibit severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) infection. We report on an improved soluble ACE2, termed a "microbody," in which the ACE2 ectodomain is fused to Fc domain 3 of the immunoglobulin (Ig) heavy chain. The protein is smaller than previously described ACE2-Ig Fc fusion proteins and contains an H345A mutation in the ACE2 catalytic active site that inactivates the enzyme without reducing its affinity for the SARS-CoV-2 spike. The disulfide-bonded ACE2 microbody protein inhibits entry of SARS-CoV-2 spike protein pseudotyped virus and replication of live SARS-CoV-2 in vitro and in a mouse model. Its potency is 10-fold higher than soluble ACE2, and it can act after virus bound to the cell. The microbody inhibits the entry of β coronaviruses and virus with the variant D614G spike. The ACE2 microbody may be a valuable therapeutic for coronavirus disease 2019 (COVID-19) that is active against viral variants and future coronaviruses.